What is Ordinary Business income and how it is calculated?

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Ordinary business income includes any earnings your company makes through daily operations. Profit from selling a product or providing a service is ordinary business income. For example, you sell $20,000 worth of products. You have $10,000 in the cost of goods sold (COGS) and $5,000 in operating expenses. Your ordinary business income is $5,000 ($20,000 – $10,000 – $5,000).

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